IDEAS home Printed from https://ideas.repec.org/p/epo/papers/2016-05.html
   My bibliography  Save this paper

Trade and Jobs: Can We Trust the Models?

Author

Listed:
  • Dean Baker
  • David Rosnick

Abstract

This paper notes the poor track record of CGE models like the ones used by the Peterson Institute and the International Trade Commission in projecting the changes in patterns of trade following recent trade deals. These models failed to project the large rise in the U.S. trade deficit with Mexico following the implementation of NAFTA or with South Korea following the implementation of KORUS. Past research has shown that these models also failed to correctly identify the winning and losing industries in trade with Mexico following NAFTA. This analysis shows that the ITC model similarly failed to identify winning and losing industries following the implementation of the KORUS.

Suggested Citation

  • Dean Baker & David Rosnick, 2016. "Trade and Jobs: Can We Trust the Models?," CEPR Reports and Issue Briefs 2016-05, Center for Economic and Policy Research (CEPR).
    • Handle: RePEc:epo:papers:2016-05
    as

    Download full text from publisher

    File URL: http://cepr.net/images/stories/reports/trade-and-jobs-2016-04.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Peter A. Petri & Michael G. Plummer, 2016. "The Economic Effects of the Trans-Pacific Partnership: New Estimates," Working Paper Series WP16-2, Peterson Institute for International Economics.
    2. Jeronim Capaldo & Alex Izurieta & Jomo Kwame Sundaram, 2016. "Trading Down: Unemployment, Inequality and Other Risks of the Trans-Pacific Partnership Agreement," GDAE Working Papers 16-01, GDAE, Tufts University.
    3. Kehoe,Timothy J. & Srinivasan,T. N. & Whalley,John (ed.), 2005. "Frontiers in Applied General Equilibrium Modeling," Cambridge Books, Cambridge University Press, number 9780521825252, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dean Baker, 2016. "The International Trade Commission’s Assessment of the Trans-Pacific Partnership: Main Findings and Implications," CEPR Reports and Issue Briefs 2016-20, Center for Economic and Policy Research (CEPR).
    2. Russ, Katheryn N. & Swenson, Deborah L., 2019. "Trade Diversion and Trade Deficits: The Case of the Korea-U.S. Free Trade Agreement," Journal of the Japanese and International Economies, Elsevier, vol. 52(C), pages 22-31.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kamal Halili Hassan & Muhammad Faliq Abd Razak & Rohaida Nordin & Rohani Abdul Rahim, 2018. "Malaysia with the Trans-Pacific Partnership Agreement: Aftermath of the United States Withdrawal From the TPPA," International Journal of Asian Social Science, Asian Economic and Social Society, vol. 8(10), pages 868-880, October.
    2. Robert Z. Lawrence & Tyler Moran, 2016. "Adjustment and Income Distribution Impacts of the Trans-Pacific Partnership," Working Paper Series WP16-5, Peterson Institute for International Economics.
    3. Tsang, Cheuk Yan & Shakur, Shamim, 2017. "New Zealand’s Trade Prospects in an Uncertain Trans-Pacific Partnership (TPP) Environment: Results from Gravity Model," 2017 Conference, October 19-20, Rotorua, New Zealand 269528, New Zealand Agricultural and Resource Economics Society.
    4. M. Alejandro Cardenete & M. Carmen Lima & Ferran Sancho, 2013. "Are There Key Sectors? An Appraisal Using Applied General Equilibrium," The Review of Regional Studies, Southern Regional Science Association, vol. 43(2,3), pages 111-129, Winter.
    5. Ken Itakura & Hiro Lee, 2023. "Should the United States rejoin the Trans-Pacific trade deal?," International Economics and Economic Policy, Springer, vol. 20(2), pages 235-255, May.
    6. Markusen, James R., 2013. "Expansion of trade at the extensive margin: A general gains-from-trade result and illustrative examples," Journal of International Economics, Elsevier, vol. 89(1), pages 262-270.
    7. Alejandro Jofré & R. Terry Rockafellar & Roger J-B. Wets, 2007. "Variational Inequalities and Economic Equilibrium," Mathematics of Operations Research, INFORMS, vol. 32(1), pages 32-50, February.
    8. Kose,Ayhan & Ohnsorge,Franziska Lieselotte & Ye,Lei Sandy & Islamaj,Ergys, 2017. "Weakness in investment growth : causes, implications and policy responses," Policy Research Working Paper Series 7990, The World Bank.
    9. Timothy J. Kehoe & Kim J. Ruhl, 2013. "How Important Is the New Goods Margin in International Trade?," Journal of Political Economy, University of Chicago Press, vol. 121(2), pages 358-392.
    10. Jonathan I. Dingel & Felix Tintelnot, 2020. "Spatial Economics for Granular Settings," NBER Working Papers 27287, National Bureau of Economic Research, Inc.
    11. David P. Brown & Andrew Eckert, 2018. "Analyzing the Impact of Electricity Market Structure Changes and Mergers: The Importance of Forward Commitments," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 52(1), pages 101-137, February.
    12. Fahman Fathurrahman & Bora Kat & Uğur Soytaṣ, 2017. "Simulating Indonesian fuel subsidy reform: a social accounting matrix analysis," Annals of Operations Research, Springer, vol. 255(1), pages 591-615, August.
    13. Ahmed, Vaqar & O' Donoghue, Cathal, 2007. "CGE-Microsimulation Modelling: A Survey," MPRA Paper 9307, University Library of Munich, Germany.
    14. Koesler, Simon, 2014. "Specifying parameters in computable general equilibrium models using optimal fingerprint detection methods," ZEW Discussion Papers 14-092, ZEW - Leibniz Centre for European Economic Research.
    15. Lee, Hiro & Itakura, Ken, 2018. "The welfare and sectoral adjustment effects of mega-regional trade agreements on ASEAN countries," Journal of Asian Economics, Elsevier, vol. 55(C), pages 20-32.
    16. Oscar Bajo-Rubio & Antonio G. Gómez-Plana, 2015. "Alternative strategies to reduce public deficits: Taxes vs. spending," Journal of Applied Economics, Universidad del CEMA, vol. 18, pages 45-70, May.
    17. Costinot, Arnaud & Rodríguez-Clare, Andrés, 2014. "Trade Theory with Numbers: Quantifying the Consequences of Globalization," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 197-261, Elsevier.
    18. M. Alejandro Cardenete & M. Carmen Lima & Ferran Sancho, 2017. "Validating Policy‐Induced Economic Change Using Sequential General Equilibrium SAMs," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 36(3), pages 291-304, April.
    19. -, 2016. "United States-Latin America and the Caribbean Trade Developments 2015-2016," Oficina de la CEPAL en Washington (Estudios e Investigaciones) 41070, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    20. Banerjee, Onil & Crossman, Neville & Vargas, Renato & Brander, Luke & Verburg, Peter & Cicowiez, Martin & Hauck, Jennifer & McKenzie, Emily, 2020. "Global socio-economic impacts of changes in natural capital and ecosystem services: State of play and new modeling approaches," Ecosystem Services, Elsevier, vol. 46(C).

    More about this item

    JEL classification:

    • F - International Economics
    • F1 - International Economics - - Trade
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • F10 - International Economics - - Trade - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:epo:papers:2016-05. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/ceprdus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.